Yes, SEB setting files for "configuring a client" are always encrypted. If no settings password is entered, then a standard password is used, which isn't really safe, but at least the file is not just readable immediately as plain text. But that's why you shouldn't use the default client settings defined with .seb files for "configuring a client" for starting exams. You should use those only for "unsafe" default settings where SEB is advised to display an exam portal page on which you place the .seb files "for starting an exam" and encrypt each with another "exam password". Or mainly on managed exam clients you could use a certificate/key.

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